Mumbai – Two of India’s biggest conglomerates, Hindalco, owned by Aditya Birla Group and Vedanta of Anil Agarwal are in race to buy Rio Tinto’s Iron Ore Company based in Canada, bankers say. Apart from these two Indian conglomerates, metal companies from across the world are in the race to buy the company which is valued at close to $1.7 billion.

Bankers said both groups are interested in the company which has iron ore reserves in Canada and a railway line to transport the ore. At present initial talks are on, a banker said. In January, billionaire L N Mittal sold off his 15% stake in several iron ore mines to South Korea’s Posco for $1.1 billion. Rio Tinto has hired Credit Suisse and Canadian Imperial Bank to sell its 59% stake. Rio Tinto is selling the company to reduce its debt.

In an interview to this newspaper, Vedanta Chairman Anil Agarwal had said the group is actively looking at iron ore, oil and gas and coal reserves all over the world. “We want Sesa Sterlite to be as big as Rio Tinto and we will buy energy resources including coal and iron ore reserves wherever we get the right opportunities and valuation,” he had said. Agarwal had not hinted at any specific target but said they are open to all opportunities.

When contacted, a top official of Vedanta group said today they have not made any bid for Iron Ore Company. A Birla spokesperson refused to comment on “market speculation.”

The Birlas are on the lookout for acquisition opportunities across the world after its high profile acquisition of Novelis paid off good dividend. Insiders say Novelis is investing close to $750 million in expansion of capacity across the world and its parent Hindalco is looking for acquisition opportunities.

If both Agarwal and Birla indeed make a final bid post due diligence for Iron Ore Company, there will be a face-off between two of India’s billionaires to acquire a global energy resource. Agarwal is expecting the group to earn close to $12 bilion to 13 billion in the next two years and is actively looking out for opportunities to deploy the funds. One of the opportunities recommended by global brokerage firm, CLSA to Vedanta was to buy Cairn Energy which has 50 oil and gas blocks all over the world and 10% stake in Agarwal-owned Cairn India Ltd.